The Rural Telco Play: Carrier Ethernet Fills Wide-Open Spaces

Public network operators increasingly are embracing Carrier Ethernet, and rural service providers are no exception. In fact, independent telcos may have more reason than anyone to adopt this technology.

That was a key message during a rural Ethernet panel at OPASTCO’s 45th Annual Summer Convention and Tradeshow July 12-16, in Quebec City.

At the show, OPASTCO unveiled a study reporting that rural telcos’ traditional revenue will diminish by 5 percent this year, 9 percent next year and 13 percent the following year — and that federal and state subsidies, including the Universal Service Fund, will not support the revenue shortfall. As a result, rural carriers will have to take quick action to launch new revenue-generating services such as Ethernet, said Gary Bolton, vice president of marketing and PLM for vendor Hatteras Networks, who was a panelist on the OPASTCO Carrier Ethernet session.

“The key message that resonated with these rural carriers is that they can leverage their existing copper to deliver high-bandwidth Ethernet services for businesses and cell backhaul,” added Bolton. “Most of our carrier customers are realizing 80 percent GM and pay back their capex investment in three to six months.”

The benefits of Carrier Ethernet are not lost on the rural telco community. Indeed, among Nortel Networks' 40 Carrier Ethernet customers are Dakota Carrier Network, Frontier, Golden West Telecommunications and Panhandle Telephone Cooperative Inc.

Increasing bandwidth demands are being driven by a variety of both residential and business applications, including IPTV, video on demand, Internet access, Ethernet services and 3G/4G wireless, noted Mike Loomis, director of Carrier Ethernet technical sales at Nortel (NT) and one of the OPASTCO panelists. And the impact of these applications fall on rural and Tier 1 service providers alike, he continued.

“Rural carriers — because of the sparseness of customers and distances covered — need to be especially efficient in rolling out Ethernet,” Loomis added. “The new Carrier Ethernet technologies — PBB, PBB-TE, Ethernet rings — allow rurals to cost effectively ramp up bandwidth to support these new services."

Golden West Telecommunications, which has grown to be South Dakota's largest independent telecommunications provider and the 35th largest telecommunications company in the nation, recently deployed Nortel's Carrier Ethernet solution to support 10/100mbps for Ethernet Virtual Private Network (E-VPN) services. Services already are up and running in key Golden West communities throughout South Dakota.

"Business services represent a growing opportunity for us to both foster further economic growth in our area, and tap into new sources of revenue," said Galen Boyd, western regional manager for Golden West. "By deploying Nortel's Carrier Ethernet solution as a complement to our existing Nortel optical infrastructure, we gain the network scale and quality that we need to support this important customer segment."

Panhandle Telephone, meanwhile, is supporting its newest residential, triple-play offerings, such as HD IPTV, with Nortel's Carrier Ethernet gear.

"There's no doubt in our minds that choosing Nortel's PBB/PBT solution over the competitor's MPLS offering was the right decision to expand our network capacity to support our drive into new markets with new services," said Gary Burke, plant manager, PTCI. "It only took five weeks between the time we signed the purchase order and the time this solution was running in our network. As a result, we are quickly able to meet customer demand for added video services and have already seen the revenue from our expanded network capacity."

Santiago Alvarez, a manager of technical marketing for the network software and systems technology group at Cisco Systems Inc. (CSCO) and an OPASTCO panelist, said that in 2012, Internet video traffic alone will be 400 times the traffic carried by the U.S. Internet backbone in 2000.

“Representative of this trend, Internet video has jumped from 12 percent of global consumer Internet traffic in 2006 to 22 percent in 2007,” Alvarez added. “Video on demand, IPTV, peer-to-peer video, and Internet video are forecast to account for nearly 90 percent of all consumer IP traffic in 2012. Within this context, Ethernet is rapidly becoming the technology of choice that can satisfy those demands at a low cost and with great flexibility. Rural service providers are not an exception in these trends.”

Among Cisco’s rural telco Carrier Ethernet customers are Whidbey Telecom and Pioneer Telephone. They use Cisco’s MPLS solution to implement Ethernet-based services.

While the examples above are all of U.S.-based rural providers, Ethernet is also finding success in outlying areas not always considered specifically as rural.

For example, Cable & Wireless Barbados recently deployed Actelis Networks’ Carrier Ethernet over Copper solution to bring a six-fold improvement in bandwidth over its existing copper-based infrastructure, which supports such services as high-speed Internet access, VoIP services and business Ethernet.

“Competing telecommunication providers are quickly building out their Ethernet networks, so time-to-market was critical to our success,” said Cable & Wireless Engineer Antonio Lythcott, who managed the network upgrade.

Related Resources:

NXTcomm Welcomes ‘Carrier Ethernet 2.0’

Carrier Ethernet Survival Guide

Rural India Captures Attention of AT&T, TCS

Rural Operators Turn to Broadband Wireless

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